INTERVIEW: Improved power supply: ‘It will only get better, not worse’

In a recent interactive session with journalists, Minister of Power Adebayo Adelabu gave updates on the efforts of his ministry in ensuring sustainable power supply to all segments of the nation’s economy. He highlights the successes and challenges, as well as the policy direction of President Bola Tinubu’s government in the power sector. Excerpts:

What is the current situation with power generation and distribution in Nigeria? What did you do to bring us to this point and what are your plans to sustain and increase it still?

As at July 27, we generated 5,105MW of power. Just few days after that, which is 8th of August, it was moved up 5,155.99MW, which is also some increase in generation, transmission and distribution. The impact has been visible. A few months back – January and February – it was tough. The criticism, outcry and blackout were massive. But, we appreciate Nigerians for their interest in the power sector.

Why do we still experience incessant grid collapse?

We have it when repair works were ongoing. It is easier to build afresh than to carryout repairs. Rome, as they say, was not built in a day. For you to start seeing the result of government policy, there is a gestation period. There is policy pronouncement, implementation and execution and there is result of the policy. There is supposed to be a time lag.  Nigerians often expect magic, but there is no magic anywhere. The only time it happened in history, from the Christian faith, is in the book of Genesis, when God said ‘let there be light and there was light.’ That was the miracle that worked. But now, as much as we can, we must work to have the light and it is a very complicated sector. It involves electrical connection – generation, transmission, distribution, metering, billing collection. As electricity is moving through all the segments of the power sector value chain, from gas supply or the dam, generation, transmission distribution to the customer, liquidity must also move back to compensate all the players in the sector for sustainability and continuity of the business. If electric current moves to customers and liquidity is not moving back, the sector will grind to a halt. We must continuously grease it and we must follow the features, complexities and uniqueness of each segment.

One of the criticisms against your deployment as Minister of Power is that the president should have made occupation of that office a round peg in a round hole?

Our problem in the power sector is not technical. Principally, it is strategic, structural and it is a problem-solving specialist that we need. They did not appoint me as a minister to start manufacturing transformers, meters, power cables or electric poles. No! What they have appointed me to do is to look at the industry to see where the hurdles and bottlenecks are, and fix them to make the sector flow. Though not a power engineer or electrical engineer, I have always been a finance, accounting, and general management specialist. As a problem-solving strategist, I am well qualified to do the job. Each of these operators in the power sector has the technical specialists that handle them. I don’t work in generation companies, they have the engineers that generate. Although the TCN is under our ministry, we have the engineers there doing the work. I don’t work in any of the discos, but the people handling the discos are specialists. They needed me to make sure that I am able to coordinate all the sectors so that the hurdles would be removed. So, what we did was to go into a comprehensive diagnosis of the issues. You cannot solve a problem without understanding the root cause, and you have to be sincere. We diagnosed, we engaged, we consulted with all the electricity stakeholders and we got to know what the problems are. Then, we met at several retreats to document what are the workable practical solutions. Not all these free-hanging abstract solutions, but what is workable. And we said we should stop lamenting; we need to go to the field and implement these solutions. The first thing that matters if you want to transform a sector is the underlining legislation.  We looked at that. From the days of Electricity Company of Nigeria (ECN) in the 60s, to the days of National Electric Power Authority (NEPA) through the days of Power Holding Company of Nigeria (PHCN), it was all centralised. It was all at the federal level. No state could play in the electricity value chain. No private sector could also bring money to generate electricity. Everything belonged to NEPA. Thank God for giving us Asiwaju Bola Ahmed Tinubu as President. He assumed office on May 29, 2023, and by June, he has signed into law the new Electricity Act of 2023 that now allows all the sub-national governments – states, local governments – to play in the power sector. You cannot centralise power sector for over 200 million people. Let all the states take their fate in their hands. That is decentralisation. The Act also allows private sector people to bring in money, establish private generating companies, and play at the distribution level. All the 11 discos today are privatised. Almost all the generating companies are privatised, except the Niger Delta Power Holding Company that is also going through privatisation process. They have 10 plants, and five plants have already been put up for privatisation.

Besides the enabling laws, you also need supportive policy. There was no practical policy to support the growth of the power sector. What we have done is to bring ourselves together as required by the Act to put together what is called a National Integrated Electricity Policy and Strategic Implementation Plan that will come up with an Integrated Resource Plan (IRP). That will serve as our manual that will guide us to plan, say ‘In the next five years how much power do we need; where do we locate all these power plants, transmission and distribution lines?’ That is the policy we put together.

The next thing has to be the market. I told you that as a financial person, if the commercial aspect is good, the industry will work. If the pricing is good, investors will come. If the tariff policy is effective and supportive of a seamless operation in the power sector,  things will be better. And we looked at it. As a people, we don’t want confrontation, criticism, abuse, condemnation, but we need it. One of the policies we have all run away from in this country is the cost-reflective tariff. All the previous administrations ran away from what is called a cost-reflective tariff. Even if government has to subsidise, which is what we have been doing in the past, there must be cash to put forward. The government can say: instead of paying N200 KW/h of power, my people, I want you to enjoy so so discount. It is allowed in America and Europe. You pay N100 and the government will help you to pay N100. It is good and everybody loves it. But is government in a position to fund the subsidy pledged? That is the issue. Where we have subsidy in other parts of the world, they will put the cash down. All these subsidies not funded have been piling up and they became huge debt that we are owing the generating companies. We are owing the generating companies N1.3 trillion. How will they operate? How will they increase their generation?  We are owing the gas companies about $1.3 billion, that we met on ground. And you are saying the industry would not be crippled. So, we attacked the market – liquidity and pricing. We are saying we should migrate as a journey, from what we have now, to a full cost-reflective tariff, which is why we increased for about 15 per cent of the market, appreciating what the low income earners are going through. We cannot say everybody should pay so much. Government is still subsidising.

The next thing is infrastructure development – infrastructure enhancement and upgrade. Power is connection, it is not like telecoms. It is a bigger market than telecoms, but you must connect. You cannot generate power via the air or abstract. There must be power connection. So, it is a complex architecture. You move power from as far as the South-South and you want to drop it in Lagos. Do you know the number of transmission high voltage 330KV lines you need to build? The number of towers, right of way compensation for properties that would be destroyed while you are constructing this? Do you know the power transformers you need to install in the substations? 300MV to 150MV to 100MV to 60MV  power transformers – these cost millions of dollars. Most of the existing equipment are old. We have not been maintaining them in the last 50 years. I saw transformers at substations somewhere in North-East and South-South that were still carrying the logo of ECN, which means it was installed in the 1960s when we were not even born. These transformers are even older than the people maintaining them. That is abnormal anywhere. So, all these require upgrading and enhancement.  

Number five is energy transition. There are a lot of rural areas where we don’t have grid extension. You don’t see power lines and they are in darkness. We must extend our energy access. What we did was to start adopting renewable energy – solar, wind and small hydros. Renewable energies are cleaner energies. And the plan that we transit from our current energy source to full renewable energy by year 2068, which is 44 years’ time. Nigeria is blessed with all the things required for renewable energy. Solar, over 30 states in this country have between eight and 14 hours of sunlight with more effective sun rays even more than Europe where solar energy is effective. Europe is about 15 per cent effective. In Nigeria, we have minimum of 25 percent effectiveness. All the 22 northern states can run on solar. South-West, even South-South and South-East can run on solar.

We are blessed with the two types of wind. Is it the desert wind across the northern states or the offshore wind? When we listen to what Mr President is trying to say, it is strategic. Two major highways that are being constructed. Lagos-Calabar highway is opening up the offshore wind source of power. After constructing that road, nine coastal states will not have an excuse not to tap into the wind energy across the coastal states. All the nine states will not have a choice than to tap into potential source of energy because it will open that corridor. The Badagry-Sokoto highway that this administration is constructing will pass across seven states, including the Sahel states in the North. It will pass through Lagos, Ogun, Oyo, Kwara, Niger, Kebbi and Sokoto states. There are so many dams along this corridor. It is opening up the dam and access to small dams, which is used for hydro power generation. If you add solar, wind and hydro, what do we ask for that God has not given us in abundance? It is now left to us to put it together and make sure they work for us.

The last thing on what we did is about power asset security. You can see that we are our own problems.  There are a lot of saboteurs around. We have witnessed vandalisation of power assets. How will people deliberately go and cut off power lines, demolish transmission towers, loot substations, steal transformers and we expect constant power? These are menace we have to deal with as a government which people do not really understand. We are setting up task forces to tackle this. Recently, I met with some people who are receiving military cooperation to secure our power assets. Government is doing all these. For about two to three weeks, the entire North-East was in darkness because they went to bring down all the transmission power lines. What can we do? And we must use tax payers’ money to replace all these.

Some Nigerians have argued that the current improvement in power supply is attributed to more rainfall. Do you agree?

That is not true. Today in Nigeria, less than 25 per cent of our power generation comes from hydroelectric power. The major dams that we have – Kainji, Jebba, Shiroro, and others do not generate up to 25 per cent of what we use. The bulk of our base load power is from gas. I mentioned 10 of them under the Niger-Delta Power Holding Company. We also have private sector operators in these gas plants. We have the Pacific, Geregu, Transcorp, Egbin and FIPL in Port Harcourt. We have more than 27 power plants out of which hydro is just about four or five. So when people say that the positive development they are seeing in power sector reform is because of the rainy season, I just smile.

Though it may sounds funny, it is even during rainy season that we do have less power generation. That is when they will be wrapping up the water levels to be able to survive the dry season. How would a sub segment that contributes less than 25 per cent be responsible for the overall improvement in power supply? The power gadgets generate a lot of heat. So, the good impact of rainy season on them is that the weather cools them down, making the tripping off less. There will be a very good temperature. But it is not because of rainy season that power generation goes up.

Are you saying that when the rain stops, Nigerians will continue to have improved power supply?

We will sustain it. We have experienced August break this season. Did you see any drop in power supply? I just want to assure Nigerians that once we are consistent with what we are doing, we will continue to enjoy good power supply.

Your administration introduced band tariff system that seems to discriminate against certain Nigerians.  In the simplest of forms, can you explain why this must be?

It is not about discrimination, it is about the strategy to correct some imbalances in the sector, and to ensure that liquidity improves in the sector. It is also to ensure continuity. Ordinarily, what we should do is to ask everybody to pay cost-reflective tariff., to what you consume. But because of the criticality of power to the generality of Nigerians, we cannot ask everybody to pay commercial price. Our income level is still very low in Nigeria, and the amount you can spend on power is a function of per capita income. Band A tariff in Nigeria today is still the lowest across West Africa. If compared to what they pay in Benin, Ghana, Togo or Niger, it is the lowest. They pay over N300 equivalent in those countries, ours is N209. But can our people afford it based on income level? It is difficult. We have seen removal of fuel subsidy and harmonisation of exchange rates, which have led to increase in the cost of living, prices of goods. So we cannot tell our people to pay the increased tariff again.

All over the world, we have the least cost of power. We now say, let us look at those areas that have very good and stable infrastructure that can support minimum of 20 hours supply per day. Why people are reluctant to pay for national electricity is because they are still paying so much to buy generators, they fuel and maintain them. We now say, if people can discard their generator, diesel procurement and petrol, they should be able to save enough and pay for national electricity. If you look at it, even if you are on Band A, what you spend on power, compared to your total aggregate cost before now, is still cheaper. But because the bills come on one paper, and you have to pay so much, you feel it more. Nigerian electricity consumer is over 12 million, 15 per cent of the market is just about 1.5 million customers that are under Band A, though, they are responsible for 40 per cent of consumption. It is not only cost-reflective, but service-reflective. If you pay N209, and Disco is not supplying up to 20 hours, they have to reverse it. You can see us penalizing some DISCOs. Abuja DISCO paid N200 million penalty. If they are able to give you 20 to 22 hours supply, you will do away with generator.

And for other customers who are not enjoying up to 20 hours, they are still on N55 to N68?

I want to draw your attention to a particular point that before now, the power sector had always been running like a cult. Even the consumers didn’t know what was happening. They didn’t know about the mechanism of operation in the power sector. But you will notice that since Asiwaju Bola Tinubu came as the president and sealed my appointment as Power Minister, we have made it as transparent as possible. Vibrancy has now been introduced in the power sector. Almost everybody is an expert in power sector based on the level of sensitisation, communication and sectoral advocacy that we have adopted in our strategy to transform and reform the sector. And, we are saying, for us to continue to enjoy and have consistency and sustainable improvement in power stability, three things must happen. One, people must be ready to pay their bills. If we don’t pay our bills, we can’t sustain the sector. The fact that tariff went up doesn’t mean that our bill must go up. We should be able to manage energy consumption. Two, we need to avoid energy theft. A lot of people today still bypass the meter and it’s not helping the sector. Three, we must all collectively protect our assets. If you see something, say something. If anybody is destroying a cable or looting any of the substations, let us shout. There is no problem we have in Nigeria today that is insurmountable, but it depends on the sincerity, passion, commitment and readiness of the people holding the office, and not allow personal interest to override the national interest. We are determined to change the fortune of the sector, and we are succeeding by God’s grace.